The Law of Diminishing Marginal Returns

question 139

Multiple Choice

The law of diminishing marginal returns

• A)sets in because not all workers are equally productive.
• B)applies only in the short run.
• C)holds even when there are no fixed factors.
• D)ultimately explains why production displays diseconomies of scale.

---

Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard amount expected to be used, multiplied by the standard cost per unit.

Materials Quantity Variance

The variance between the actual amount of materials utilized in manufacturing and the anticipated amount, multiplied by the established unit cost.

Raw Materials Price Variance

The difference between the actual cost and the standard cost of raw materials used in production.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected amount of materials that should have been used, measured at the standard cost.